June 19 Asian Macro Initial Thoughts US Future moving higher
Covid-19 Globally over 8.4m cases, 500k deaths
US Futures opened +90pts and have risen to +170pts but expect volatility ahead of expiry.
DOW -0.15%, NDX +0.33%, S&P +0.06%, Russel 2K +0.04% Dow +S&P opened lower and traded sideways just below Wednesdays closing level. NDX opened slightly higher and traded just above Wednesday closing level. Initial claims were larger than expected. Covid-19 new cases continued to rise in certain States; raising worries about more social distancing measures. China said the outbreak in Beijing was under control.
Kroger weak after it said sales growth had tapered in recent weeks and flagged unexpectedly costs.
US Steel weak after cutting current-quarter guidance and launching a share issue to shore up its balance sheet.
Initial Claims 13 Jun 1.7735m vs 2.008m prior (F/cast was 1.678m)
Philadelphia Manufacturing Index Jun 27.5 vs -43.1 May (F/cast was -22)
CB Leading Index May -2.8% MoM vs -6.1% Apr (F/cast was +1.7%)
EIA Natural Gas Report 12 Jun 85Bcf vs 93Bcf prior (Consensus was 85 Bcf)
USD weaker vs Yen & Euro. Bitcoin -0.7% @ 9,372.46, VIX -1.6% @ 32.9,
US T10 0.707% as covid-19 cases rise
OIL Brent +1.9%, WTI +2.32% as OPEC+ met to review compliance to output cuts.
Gold -0.1%, Silver -1%, Copper +0.4%
AHEAD Current Account, Baker Hughes Total Oil Rig Count
DAX -0.81%, CAC -0.75%, FTSE -0.47% having opened lower, seen a small rally into the green but then reversed and sold down and finally a small rally into the close. BoE kept rated unchanged and added GBP100bn to its QE programme, but markets had been expecting more. BANKS & RESOURCES lead the declines. CHEMICALs saw interest.
Investors remain concerned about covid-19 despite China saying Beijing outbreak under control. US initial claims rising also a concern.
Wirecard -62% as it delayed publication of its 2019 financial report and auditors warn Euro 1.9bn is missing
Siemens Game -7% on news the CEO was stepping down.
Taylor Wimpey -5.7% after announcing a GBP 500m equity raising
Prudential +3.4% after announcing a US$27bn re-insurance deal for its US business.
UK UK BoE Interest Rate Decision Unchanged @ 0.1% as f/cast
MPC Meeting Notes
EUROZONE Current Account, EU Council Video Conference
FRANCE No data due
UK Retail Sales, Public Sector Net Borrowing,
JAPAN Expect Nikkei to lower with weak inflation data but likely to work higher as US futures opened higher. Yen strengthened and currently 106.92
Data due Inflation Rate, Inflation Rate Ex Food & Energy, Core Inflation Rate, BoJ Monetary Policy Meeting notes.
Government will lift its request to avoid travel to and from Tokyo, Hokkaido and three other prefectures on Friday and ease other social distancing requirements.
Japan will advance talks to ease its entry ban on Australia, New Zealand, Thailand and Vietnam, as it seeks to gradually step back from travel restrictions
Government in talks with US over suspension/cancellation of Aegis on-shore system suspension plans.
A former Japanese justice minister and his lawmaker wife were arrested on Thursday on suspicion of vote-buying, prosecutors said, in a serious blow to PM Abe as he struggles with falling public support.
Nintendo rises above Yen 50,000 for the first since 2008 as investors anticipate good take up of its forthcoming games. +VE
Uniqlo Co. unveiled to the press on Thursday its new flagship store in Tokyo's upscale Ginza shopping district, ahead of the store’s grand opening the today.
SOUTH KOREA Expect markets to open flat but work higher
No data due
Government has requested the World Trade Organization to open a dispute-settlement panel to deal with Japan's export curbs against its Asian neighbor, which have been in effect since July, the trade ministry here said Thursday.
South Korea’s full service airlines have decided to extend the validity of their mileage points by one year as customers are finding it difficult to use them amid the virus pandemic, officials said Thursday.
Netmarble’s StoneAge World, a new mobile game was ranked No. 1 on Apple's App Store in the country Thursday. +VE
Medytox -VE as Meditoxin has been stripped of its license, as of Thursday, in a blow dealt by the Drug Ministry against the company’s use of unauthorized substances in the botulinum toxin products manufactured between 2012 and 2015.
Volvo Car Korea said Tursday it will invest 150 billion won ($124 million) over the next three years to expand its after-sales service centers to better serve customers.
TAIWAN Expect market to open flat but work higher lead by Tech
No data due but on Saturday Export Orders
The central bank yesterday kept its policy interest rate unchanged at a record low of 1.125 percent, saying that the negative impact of the COVID-19 pandemic has stabilized and consumer activity would get a boost in the second half of the year.
Taiwan’s telecom market is overcrowded, which might make prices for 5G services the lowest in the world, given the intense competition, Taiwan Mobile Co said yesterday.
CHINA Expect market to open higher on news that Beijing’s covid-19 outbreak is under control.
No data due
India on Thursday cautioned China against making "exaggerated and untenable claims" to the Galwan Valley area even as both nations tried to end a standoff in the high Himalayan region where their armies engaged in a deadly clash. Comes as satellite images suggest Chinese activity at Himalayan border with India before clash which include China bringing in pieces of machinery, cutting a trail into a Himalayan mountainside and may have even dammed a river, satellite pictures suggest -VE
China’s attitude in talks with the United States this week in Hawaii cannot be described as forthcoming, although it did commit to following through on Phase One of the U.S.-China trade deal, the senior US diplomat for East Asia said on Thursday. David Stilwell, who spoke after U.S. Secretary of State Mike Pompeo met China’s top diplomat, Yang Jiechi, in Hawaii on Wednesday, told reporters the next couple of weeks would show whether the talks were productive. Slight -VE
Trump on Thursday renewed his threat to cut ties with China, a day after U.S. Trade Representative Robert Lighthizer told Congress he did not see decoupling the US and Chinese economies as a viable option. -VE
HONG KONG ADR’s -71pts to open at 24,393 with weakness in financials.
No data due
Short Selling HSI Thursday 26% vs 21.2% Wednesday
Top Shorts Wharf REIC (1997) 61%, Hang Lung PPY (101) 52%, Hang Seng Bank (11) 49%, HSBC (5) 48%, Mengniu Dairy (2319) 48%, Want Want (151) 45%, NWD (17) 39%, ICBC (1398) 38%, Bank of China (3988) 36%, MTRC (66) 35%, Shenzhou (2313) 34%, CCB (939) 31%, AIA (1299) 30%, Ping An (2318) 30%, CK Asset (1113) 29%, Sunny Optical (2382) 29%, Henderson Land (12) 29%, BankComm (3328) 27%.
KANGJI MEDICAL (9997.HK), to close its IPO at noon tomorrow, registered over $101.8 billion of margin granted by 14 brokers in three days as at around 6 pm today.
BABA-SW (9988.HK) said that Tmall's overall turnover had ballooned 100% YoY in the first hour of 18 June, the day of "618 Shopping Festival".
Hong Kong Airlines was asking Hong Kong Government for a bailout plan after the latter had earlier offered to rescue CATHAY PAC AIR (293.HK) South China Morning Post reported.
PRU (2378.HK) reached agreement with Athene Holding, a leading retirement services company, for its subsidiary Athene Life Re Ltd to invest US$500mn in Prudential’s US business in return for an 11.1% economic interest with voting interest is 9.9%. Athene’s investment will be deployed in Jackson, strengthening its capital base. Athene Life Re Ltd has also fully reinsured a US$27.6 bn in-force portfolio of Jackson’s US fixed and fixed indexed annuity liabilities under a long-term arrangement. +VE
Citibank announced the launch of Citi HKTVmall Card which entitles cardholders to a 7% rebate when shopping on HKTVmall. The team-up enables HKTVmall users to apply for the credit card and make purchases and payment with reward points via the HKTVmall app
PACIFIC TEXTILES (1382.HK) announced annual results ended March 2020. Net profit HK$743mn, -13.7% YoY with EPS of HK$0.51. Final DPS was HK18 cents, as compared with HK25 cents last year.
SA SA INT'L (178.HK) -VE on Dividend suspension .
stated that month-on-month sales recovery was recorded upon growing footfall as a result of the eased gathering ban. With 99% of it's Hong Kong T/O was contributed by local customers in June, after a raft of promotions to lure local buyers. They witnessed a faster recovery in Mainland business. Despite closing ten stores amid the plague, SA SA INT'L had opened four to five stores over the past two months, while expecting to see at least ten shop openings this year. He also stressed the upbeat view on the Mainland market for the second half of year, especially online business. Among the 37 HK outlets up for lease renewal this year, the cosmetic chain has renewed lease for six on a long term basis, with rent trim averaging 40%; and for another seven, leases are on a 3-6 month basis, with rent trim over 50%. They estimate to shut down no fewer than ten outlets this year as he does not see resurgent business volume in the tourist spots in the near future as political events and the epidemic in Hong Kong have reshaped consumers' outdoor shopping patterns. It decided not to distribute final dividend this year for the first time. They hoped minority shareholders will understand the firm's intention to keep cash on hand under the current environment. They pledged to resume payout when the business takes a turn for the better.
Meeting with six local major catering associations today (18 June), Financial Secretary Paul Chan said the industry will offer discounts and promotions to stimulate local consumption. The catering industry will launch discount dinner offers from 15 July, with 30% off dinners for July and 20% off meals for August, revealed LegCo's catering representative Tommy Cheung, who expected thousands of eateries to partake in the program. The list of participating restaurants will be unveiled on website in early July.
Hong Kong Jockey Club stated that taking note of recent improvements in the COVID situation, it has decided to re-open its Off-Course Betting Branches (OCBBs) on non-racedays from 22 June to the end of the current racing season to provide betting services for races and customer services. Betting services for football will not be available at OCBBs, and the Mark Six lottery will remain suspended
I-CABLE COMM (1097.HK) For the first time in 7 years recorded positive cash flow in 3-4 months in a row, meaning that the group has stopped "bleeding" in cash although depreciation is yet to be priced in, said Chairman David Chiu. The TV platform has recently reported a surging number of subscribers, 40% rise in advertising revenue for its free TV channel and over 500,000 installs for its OTT app. Chiu voiced his delight with the high click rate of their app and Facebook page. While I-CABLE COMM has recently strategically teamed up with CHINA MOBILE (941.HK), the chairman disclosed that they are not considering investment plans from the telecom carrier, but there are many other possibilities.
LH GROUP (1978.HK) Chairman Simon Wong disclosed that the industry performance is dependent on the number of infection cases, rather than HSI, and that the group has recovered 70-80% of its business. During the hardest time in March, the eatery chain had closed all its hotpot restaurants for roughly three weeks, added Wong. However, no severance was done while they do not hope to cut costs by means of job cuts in the future. The chairman disclosed that the group will slow down on expansion plans. Some leases have been nailed down for new restaurant opening in 2H20, following none in 1H20.
Centa Valuation Index (Major Banks) (CVI) last printed at 75.52, -6.51 pts WoW. The index plunged from 90 to 75 in three straight weeks amid the re-emergence of social movements. The steeper slide this week meant banks were turning less proactive on mortgages. -VE